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Creative must tune in to the MP3 market |
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Wednesday, 20 July 2005 |
Creative must tune
in to the MP3 market
IT AsiaOne
- Singapore,Singapore
Creative Technology's shares last week saw a dramatic pick-up. Trading at
around $10.90 last month, it jumped to $13.10 last Friday. This surge came hot
on the heels of pro-Creative comments from Microsoft chairman Bill Gates who was
in Singapore last month.
In an interview with Business Times published 10 days ago, Mr Gates said
Microsoft would help MP3 vendors, of which Creative is a major player, to come
up with better-designed products. He also promised to use Microsoft's marketing
clout to help them.
This must be good news for Creative which has been fighting a tough battle
against its biggest competitor, Apple Computer, the undisputed MP3 market leader
today.
Creative will need all the help it can get for it to do better than a single
digit market share of the worldwide MP3 market which has attracted a steady
stream of players from biggies like Samsung and Sony to no-name brands from
Taiwan.
In its last financial report for the quarter ending March 31, Creative's profit
fell. It cited lower demand for its players as the main cause.
The scene can't be more different from Apple which announced brilliant results.
Its latest quarterly profit had more than quintupled, fuelled by record iPod
sales.
Under siege
Singapore's homegrown multinational is under siege. With 70 per cent of its
revenue coming from MP3 players, its corporate performance depends on how well
it does in this market.
In the high-end MP3 hard disk segment, Creative is confronted by Apple and its
marketing strategy par excellence which has turned the iPod into a global
cultural icon sought by the hip and cool.
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